Why Covid-19 Vaccine Prices May Be Unexpectedly Low – Barron’s

Filling and packaging tests for the large-scale production and supply of the University of Oxford’s Covid-19 vaccine candidate, AZD1222,

Vincenzo PintoAFP via Getty Images

If the vaccines now in final clinical trials against Covid-19 prove effective and safe, there should be plenty to go around.

Developers like Moderna (ticker: MRNA), Pfizer (PFE), BioNTech (BNTX), Johnson & Johnson (JNJ), Novavax (NVAX), and AstraZeneca (AZN) are preparing to make billions of doses. Others working on vaccines include GlaxoSmithKline (GSK), Merck (MRK) and Sanofi (SNY), all manufacturers with plenty of capacity.

In contracts with governments, there has been a range of pricing. Moderna has sales agreements at more than $30 a dose, but analysts are incorporating a figure of $20 a shot for its volume deals into their financial models. In Europe, Sanofi cut a deal equal to around $12. AstraZeneca’s contract with the European Union is priced at just $3.

A Reuters story Friday morning found one reason why AstraZeneca can offer such a low price. Reuters says it learned from an EU official that AstraZeneca’s deal with Europe’s governments will cap the drugmaker’s liability for harm blamed on its vaccine’s side effects. Sanofi arranged no such indemnity, so it required a higher price than AstraZeneca, said Reuters.

In trading Friday, AstraZeneca stock was up a fraction, at $54.47. Moderna rose 4%, to $68. BioNTech was up 3% to $64. 65. Novavax gained 11% to $113.82 after announcing the start of a Phase 3 trial for its vaccine.

AstraZeneca’s Phase 3 trials were paused this month, to check whether neurological problems experienced by a British volunteer might be related to the investigational vaccine. Such safety halts are not uncommon events in vaccine trials. The study has restarted in the U.K., but not the U.S.

The Covid vaccines are being developed and tested at speeds far faster than any before. Clinical trials for vaccine safety typically have lasted years. To free developers from liability concerns, the U.S. has promised immunity from product liability for approved Covid vaccines.

Another reason for the spread in vaccine prices is the decision of some manufacturers—including AstraZeneca and J&J—to forego profits on Covid vaccines during the pandemic.

Asked how Moderna will realize premium pricing for its vaccine, its executives have told conference-call listeners that the company expects study data to show that its product is better than others.

Write to Bill Alpert at william.alpert@barrons.com

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Author: The Covid-19 Channel